From the Rolls-Royce experimental archive: a quarter of a million communications from Rolls-Royce, 1906 to 1960's. Documents from the Sir Henry Royce Memorial Foundation (SHRMF).
Decision of whether to manufacture electrical units in-house or purchase them from external suppliers like Lucas, Bosch, or C.A.V.
| Identifier | WestWitteringFiles\V\March1931-September1931\ Scan172 | |
| Date | 11th May 1931 | |
| SC. FROM R.{Sir Henry Royce} C. to WOR.{Arthur Wormald - General Works Manager} EY. HS.{Lord Ernest Hives - Chair} re. ELECTRICAL UNITS. ORIGINAL RECEIVED 11 MAY 1931 If it is decided that we buy these, I should not feel satisfied with anything I have seen so far produced by the Lucas Co., and should require the RR. Co. to purchase these parts of the quality produced by the Bosch Co., which is the only make comparable with ours for life and reliability. We understand however that it is proposed that these shall be made in England by the C.A.V. Co. I hope however the Works will be able to decide, and you to agree, that it will be more economical for the Co. to produce them in their own department at Derby, otherwise we shall lose both in reputation and in contribution towards standing charges. I believe that I have proposed that we have a Committee, with WOR.{Arthur Wormald - General Works Manager} as head, consisting of SY., HY.{Tom Haldenby - Plant Engineer}, and RHC.{R. H. Coverley - Production Engineer}, who will decide whether we ought to make or buy, and if the former, whether the designs are satisfactory from the point of view of manufacturing costs comparable with those of competing firms, and whether the numbers justify our making. Generally speaking if the article is made in large quantities by a specialist and requires no modification to adapt it to our car, and it is thoroughly satisfactory and cheaper than we can produce it - such as sparking plugs - it will not be commercially possible for us to manufacture the small numbers we need, but if it is specially made for our cars it is most likely that we can make it better and as cheaply as we can buy: if not the reason should be found. It will be understood that it is not fair to the productive ability of our Works to charge all the standing charges on labour, and that raw material, and especially manufactured parts, should and must bear a percentage of the charges, as even if they are bought out they entail expenses not only of the buyer, clerical staff, stores, and sales capital, but a considerable amount of attention of the technical side of the business, and testing and approving every type and perhaps every specimen. My estimate is that raw material and manufactured parts should bear approximately the same percentage, and this percentage would be in the neighbourhood of 15 to 20%, generally in most Works about 1/10th. of the percentage carried by the production labour. (1) | ||